Bullet Proof Your Business

Walking Off the Shelves

Theft of goods is high on the risk list for retailers. Statistics are readily available; in the early 2000s one of Australia’s largest retailers estimated losing nearly 8% of its turnover to retail theft. Here is a case study of how retail theft occurs.

We have learned quickly how prolific and professional shoplifters are in their occupation. Using a tip-off, we attended a hotel suite where we saw racks of designer-label men’s clothing for sale at substantially reduced prices. We made a few purchases and then performed some surveillance in the foyer for the next three hours. During this period, we observed and later identified 16 people enter the hotel with large shopping bags, filled with product. These individuals attended the hotel suite and left a short time later with the same bags, which where then empty.

They were part of a well-organised criminal gang that were systematically stealing from top-end retail clothing outlets. Our investigations led to and later successfully prosecuted the organiser, a male who directed operations from his unit some distance away.

He had eight teams with two shoplifters in each team. Each shoplifter carried no identification. All were dressed well and had large designer shopping bags, containing a small amount of clothing. Each bag was heavily lined with aluminium foil. This was done to prevent security tags from alerting sensor software at entry and exit points. The modus operandi of each group was simple:

• Choose retail stores with limited security and staff.
• Target high-value items.
• One thief would distract staff with an enquiry, while the other stole.
• All stolen goods would be transported to the hotel and swapped for cash.
• Accomplices at the hotel had created a market for the sale of the stolen goods, by spreading the word through a network of prostitutes and known criminals who attended and bought goods for themselves and their partners.

We recovered goods to the value of $190,000 that day – designer suits and shirts, leather jackets and ties. We also recovered $34,000 in cash, representing about 30% of sale price. A total of 15 people were successfully prosecuted.

Over the years, one particular informant provided us with a wealth of intelligence on the retail theft industry. He was able to do this as for a time, he was an expert shoplifter himself. We soon learned that there were a large number of professional thieves who spend their day preying on retail opportunity.

Many had ready markets available for sale of particular goods. Many also took orders from associates at various workplaces and had shopping lists of required goods. During tours of shopping centres my informant would point out the many criminals posing as shoppers, out doing their ‘businesses. He would also educate me in the identification of opportunity.

After he had done his time, and changed his outlook on life, we had him consult to me on the many aspects of the retail theft industry. He was able to provide great advice to many of my retail clients.

How much stock can I afford to lose from my store?

• None

You will probably need a balance between well-trained staff to identify potential shoplifters and video monitoring systems.

Ensure all stock is marked and identifiable as belonging to you and situated within the store in positions were you can observe it easily.

The entry and exit points to the store are monitored and you have a customer service policy that deters potential shoplifters by the nature of it being friendly and very attentive.

Some stock – of minor value

You will need to apply a strategy similar to that where you cannot afford to lose stock. However, there is an opportunity for the business to place stock of a non-attractive and inexpensive nature in places where they are more vulnerable to theft; for example, outside the store, on display tables or at the rear of the store where visibility from staff is not as good.

Considerable amount of stock – of minor value

Obviously if the business is in a position that it can afford to lose some minor inexpensive stock then these goods should be placed in the areas of highest risk and especially used for advertisement purposes outside the store.

What is the likelihood of someone (attempting) to steal from my store?

Low – very unlikely

Then the monitoring for shop stealing can be reduced. However it is important to ensure that valuable and attractive items are well secured and easily accounted for.

Medium – probably likely

Obviously the business needs to be vigilant and possess good policies and procedures to deter and identity shop stealing. These procedures include appropriate placement of goods within the store, signage that shoplifters will be prosecuted and trained staff to identity risks.

High – very likely

• Install video equipment that covers as much of your floor space as possible.
• Train your staff in how to identify potential shoplifters and how to deal with them.
• Ensure that you can identify all your goods.
• Be proactive – do not wait for the event to occur, apply an active sales approach to customers that you feel are high risk.
• Reward your staff for deterring shoplifters.

Can I see customers and goods in the store?

Yes

Ensure you know how to deal with suspected shop stealers before they try to leave the store.

No

The risk of shop stealing is increased and it is important for your business to consider the following:

• Reassess the display of the store.
• Place minor and inexpensive goods in the positions that you feel are more at risk to be stolen.
• Valuable and attractive items should be placed behind the counter and if possible in a locked cabinet.
• Be proactive towards customers.

How to identify a shop stealer….

Shop stealers range from organised groups to impulsive or opportunistic individuals who take advantage of a situation. There is no definitive guide to identify potential shop stealers, however the following points can help.

Indicators of suspect shop stealers

• Customers with large shopping or other types of bags.
• A frequent customer in the store who does not buy any product.
• Customers who are overdressed for the climate or environment; for example wearing large bulky coats on a warm day.
• A customer selecting products, but not proceeding to the register for an excessive amount of time.
• Two persons entering the store and going their separate ways and shopping independently.
• Two persons or more entering the store – one of whom engages staff in conversation while the other person is not visible.

Does the business have a bag inspection policy?

Yes

Does it include a condition of entry sign?

No

It is necessary for the store to outline to customers a ‘conditions of entry’ policy, with respect to the right to request inspections of bags that are capable of concealing stock, by the store.

• The inspection should be visual only and not a complete search.
• Where it is impossible to achieve this, the customer should be requested to remove articles from the carry bag.
• The staff member must be positive and confident with the proper attitude to avoid an altercation.
• Any property located should be compared with invoices and receipts.
• The search does not include searching of a customer’s clothes or person.

Can I identify the goods as belonging to my store?

It is vital that a business can identify its goods, as this is a key element in evidence that would be required should a shop stealer be prosecuted:

• For valuable and attractive goods, ensure that each item is tagged and/or labelled appropriately.
• If serial, model or identification numbers are available, they should be recorded prior to placement on the floor.

Materials, tools and equipment…………..

The protection of assets is an important part of any business. This section deals with the protection of business materials, tools, and equipment against fraudulent use.

• Inadequate stock-take procedures and events.
• Inadequate asset registers.
• Poor physical security.
• Poor records of movement.
• No accountability by staff for usage.
• No identification of equipment.

Prevention measures………….

• Implementation of a policy for the use of equipment listing business position and responsibilities.
• Identification of assets the business can and cannot afford to lose.
• Ensuring valuable items are secured and access is limited.
• Undertaking regular stock-takes of tools and equipment.
• Maintaining a register of all assets.

Material, tools, equipment checklist

• Are there frequent and adequate stock-takes?
• Is there an asset register?
• Are records of movement adequate?
• Are serial numbers recorded?
• Are tools and equipment marked with business identification?

How do I establish a case of shoplifting?

• Proof that the customer removed goods from store position.
• Evidence of concealment or intent to leave without payment.
• Customer left store without payment.
• Witness evidence of theft.
• Proof of ownership of goods.

Does the business have a plan to deal with suspected shop stealers?

The identification of a person stealing from a store can be extremely hard for staff and needs to be appropriately handled.

• Written plan circulated among staff.
• Procedure for identifying suspect shop stealers.
• Decision on disruption or observation strategy.
• Incident register maintenance.

Dealing with the shop stealer...

• Observations of staff are crucial.
• Description and behaviour recording.
• Location tracking in store.

Dealing with the customer inside the store

• Approach politely and confidently.
• Offer assistance before exit.

Dealing with the shop stealer outside the store

• Approach as soon as practical.
• Two staff members if possible.
• Request return to office.
• Record details and statements.

What arrangements do I have in place to deter shop stealing?

• Signage warning prosecution.
• Video surveillance.
• Proactive customer service approach.
• Staff training.

Does the store operate a drive-through for pick-up of goods?

• Check vehicles entering and leaving.
• Ensure proper signage.
• Verify receipts and documentation.

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